UK out of recession – probably
Britain’s economy has emerged from recession – but only by registering growth of just 0.1% in 2009’s final quarter.
The Office for National Statistics (ONS) confirmed its preliminary estimate was that the economy had returned to growth.
But the ONS’ Joe Grice admitted its calculations for the essentially stagnant economy could be adjusted so that the recovery has not yet begun.
“That is the estimate we have,” Joe Grice of the ONS said.
“That figure is open to revision. The evidence we have is revisions over the last ten years or so have been quite small. The typical revision at this stage might be 0.1 or 0.2, in either direction.”
Bookmakers William Hill offered odds of 8/11 that the country would return to recession before the end of 2010.
Spokesman Graham Sharpe said: “We are out – but by a wafer thin margin which suggests there is every possibility that we will drop back in at some stage of 2010.”
Analysts’ expectations had predicted the economy’s growth would stand at 0.4 per cent.
Uncertainty about the end of recession was intensified by the news that the manufacturing sector, boosted by the car scrappage scheme, had performed especially well with a 0.4% increase. Without this contribution it was not clear whether the recession would have ended.
And many sectors continued declining or stagnating, including construction, agriculture, forestry, fishing, transport, storage, communication, business services and finance.
“Far from the quick recovery the chancellor has been praying for, the economy is only just staggering back into growth,” Liberal Democrat Treasury spokesman Vince Cable commented.
“The British economy has had the economic equivalent of a heart attack and is still very weak. With both the construction and banking sectors in trouble, we are not out of the woods yet.”
It comes after the third quarter of last year registered a 0.2 per cent contraction, unexpectedly prolonging the recession by three months and making it the longest since records began in the 1960s.
Yesterday Conservative party leader David Cameron described the 18 months of negative growth as the “great recession” and warned that, despite the recession drawing to a close, Britain had been one of the first into recession and one of the last out.
“Labour’s debt crisis is the biggest threat to our recovery. So we’ll only get this recovery right if we start right now on a proper debt reduction plan,” he said.
Gordon Brown is leading the government’s attempt to put the recession into the past, by leading Labour’s attempt to make the coming general election about its plan for the recovery.
“We must reduce our deficits steadily according to a plan but we must do nothing this year that will put our recovery at risk,” the prime minister warned.
“Any party that is suggesting we make serious cuts in the economy today is putting the recovery at huge risk.”
Britain’s economy entered recession in April 2008 when the economy, which had grown by 0.7% in the first quarter, slipped into negative growth of 0.1% in the second quarter.
The slowdown hit its nadir in the first three months of 2009, shrinking by 2.5%, before the rate of contraction slowed first to 0.6% and then 0.2%.
The news comes on the same day as Bank of England governor Mervyn King told MPs Britain needed to engage in banking reforms similar to those advocated by Barack Obama in the US.
